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ImmunoGen, Solid Biosciences and Insys lead Wednesday’s biotech losers

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Shares of ImmunoGen Inc. led biotech’s losers on Wednesday, falling 38% in intraday trade after the company disclosed that the U.S. Food and Drug Administration had recommended it run a second Phase 3 trial of an ovarian cancer drug.

A first Phase 3 trial of the biotech’s IMGN, -33.49%  investigational drug, called mirvetuximab soravtansine, failed to show that patients on the therapy had better progression-free survival or overall survival than those on chemotherapy. Despite the disappointment, the company had hoped the FDA would consider approving mirvetuximab for a subgroup of patients with ovarian cancer who showed improvement while on the therapy.

However, the subgroup data wasn’t enough for the FDA, which recommended during a recent meeting that ImmunoGen conduct another Phase 3 trial entirely — a costly and time-consuming endeavor that could push the approval process back years.

Although the news hit ImmunoGen’s stock hard, analysts didn’t seem too surprised. “We viewed it as unlikely that the FDA would consider a subgroup analysis,“ Jonathan Chang of SVB Leerink wrote in a note to clients on Wednesday.

There has been some concern among investors about the biotech’s cash position in the face of a new trial. ImmunoGen had previously disclosed that it was conducting an operational review of its business to extend its cash runway, and the company said it had around $270 million in cash and cash equivalents at the end of the first quarter.

During an earnings call with analysts on Wednesday, H.C. Wainwright’s Debjit Chattopadhyay asked ImmunoGen’s management to provide details on how much the first Phase 3 trial had cost so investors could get an idea of how far the company’s cash could go. Management would not provide specifics, but said it was confident it had enough cash on hand.

“I would apply average oncology clinical trial

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